A selection of weekly articles by top Bahamian commentators.

July 02, 2012

Leslie Miller and the Racist LNG Conspiracy

Last week, Progressive Liberal Party MP Leslie Miller went on talk radio to complain bitterly that this column had "lambasted" his appointment as BEC chairman.

Indeed. I wrote that Miller's appointment had "turned back the clock" on one of our key economic sectors (Miller had been BEC chairman for three years from 1987 under the Pindling government).

But Miller went on to say that I was part of a racist "conspiracy to enslave the minds of Bahamians". The object of this conspiracy (involving environmentalists and journalists) was to prevent the use of liquified natural gas (LNG) to generate electricity in the Bahamas.

Miller claimed, "The minute you say LNG, instead of looking at the subject they kill the messenger, and I happen to be the messenger…People like Smith and (that) little group of conspirators try to hold the majority of the Bahamian people back and keep them in their place. They want to dictate the course of our country to the detriment of the many."

For those who may not recall, in the last Christie cabinet Miller was an ardent proponent of foreign proposals to build LNG regasification terminals in the Bahamas to send natural gas imported from Trinidad to Florida via an undersea pipeline from Bimini or Grand Bahama. These proposals were never approved.

Just to be clear, LNG is natural gas that has been converted to liquid form for storage or transport. To produce power it has to be regasified and distributed as pipeline natural gas. The costs of LNG treatment and transportation are huge, and new plants take five years to build.

"How do we lower the cost of fuel?," Miller asked his radio audience. "LNG is the way that every country has gone over the last 20 years. In the US, a new regasification terminal is coming on stream every 24 months."

Well, not quite.

Gas has a 21 per cent share in the global primary energy mix, behind oil and coal. But the International Energy Association estimates that gas could overtake coal and rival oil by 2035. In 2010, LNG amounted to 9 per cent of global gas consumption.

And according to the US Energy Information Administration, there is currently one gas liquefaction plant on stream in the US, none under construction, and one planned. There are six regasification plants operating in the US, none under construction, and one planned. Seven planned plants have been cancelled or suspended recently.

Miller's argument was that LNG facilities are safe, and the aborted proposals to build regasification terminals on either Ocean Cay (near Bimini) or Grand Bahama would have created a new industry for the Bahamas, while potentially helping BEC to lower fuel costs - if we could have moved the gas to New Providence.

He was right - up to a point.

As I have noted on several occasions, "the hysteria that swirled around (the Bahamian) LNG proposals was never much rooted in reality. LNG infrastructure has its risks, but they are no greater than the risks we currently face with heavy fuel oil and diesel transport and storage, where the environmental hazards are well known. And burning gas instead of heavy fuel oil or diesel produces 30 per cent less pollution."

That is just one paragraph that Leslie Miller clearly hasn't bothered to read.

However, the plain fact is that a Bahamian LNG terminal would be a very large light-coloured elephant in the current energy market. That's because the development of large, unconventional gas fields will make the US a major LNG exporter over the next few years, in sharp contrast to previous years when the US was seeking to import LNG from the Middle East and Trinidad.

Last year I reported on a Florida firm called Carib Energy that had just received the first US license to export smaller quantities of LNG (up to 145 million gallons per year for 25 years) to the Bahamas and other countries in the region.

The gas would be exported in special cryogenic tanks fitted inside 40-foot shipping containers. And the company said smaller utility, industrial or resort power plants could save up to 20 per cent in fuel costs by switching to LNG.

"We will be able to import LNG into the Bahamas without any large infrastructure being built, as early as 2012," Carib Energy President Greg Buffington told me. "We will supply customers with a re-gasification unit on a small skid to convert the liquid back to gas and send it straight to the generators."

Carib Energy is a partnership between Buffington's Coral Springs-based EFG Industries, which has 31 years experience in the engineering and construction of LP gas facilities around the world, and the Argosy Group of Bellaire, Texas, which specializes in heavy lift transportation solutions.

Gas turbine generators will take any fuel while diesel gensets can easily be converted to use natural gas. Smaller 1-3 megawatt units can be converted for under $50,000. They can also be modified so that they start up on diesel, but use gas for peak loads.

"We are looking to displace up to 60 per cent of the diesel fuel on these units," Buffington told me. "The container systems are being built now and our supply capability will grow month by month and year by year. We are currently negotiating agreements with two resorts in Jamaica, and we are also talking to the power company there."

Meanwhile, electricity demand in the Bahamas is growing by some 5 per cent a year, according to BEC. And this growth assumes that significant energy conservation measures such as lighting and appliance efficiency improvements, along with a major expansion of solar water heating, are put in place to curb overall demand.

Five per cent growth translates into 13 megawatts of power at a cost of $1.5 million per megawatt installed - an investment of about $20 million a year, or $200 million over 10 years.

Hopefully, now that he is chairman of BEC, Leslie Miller will do his homework before shooting off his mouth again.

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Comments

Mr. Smith, do not lower yourself by engaging in an academic discussion with Mr. Miller because it is fruitless. While I am fascinated by the Political Change as expressed by The Bahamian People in the past election, I am baffled by Mr. Miller's appointment. We need someone who is intelligent, educated, progressive and knows all facets of the arena that deals with BEC and the new sources of energy while maintaining a balance with the environment and providing efficient energy to the GREAT CITIZENS of the entire Bahamas. Mr. Miller's response was relegated to an old trick: Trying to insight a racial/class riot because of his profound IGNORANCE. The Bahamian Electorate will soon see that Mr. Miller is still, has always been and will remain in an arena where ignorance and self denial are the order of the day. I truly hope that Prime Minister Christie and his party does an exceptional job during these difficult times but this choice in Mr. Miller was a HORRIBLE one. While my Party loss the election and we (The FNM) need to seriously take stock of our current situation, as a Bahamian, I do not want The Bahamian People to suffer any more than they have too. Mr. Miller's appointment as BEC Chairman reeks of PAINFUL SUFFERING. God Bless The Bahamas and Her Wonderful Citizens. May God guide Prime Minister Christie in his decision making.

Miller was actually an advocate of the LNG plant on Ocean Cay, which made no sense until one thought of the potential self interest that lay at that site!
(directorship, shareholder, King of the sand bank!)
Grand Bahama would have been host to Tractabel at the Freeport Harbor site, or Suez near the Burma oil site, which would have required more miles of underwater pipeline. These two combined efforts but too late as we had already shot the horse.
The problem with ocean cay, other than the Biminites aversion to it's proximity would have been Who would benefit easily? (population wise)
None easily I would say, as moving it around would add to the costs significantly.

Due to changes in the US Rules and regulations the DOE License to ship to NFTA ( non free trade agreement) countries which the Bahamas is, has been delayed. The US Government is requiring that all LNG that is being exported to NFTA Countries must be done so from a Section 3C and Section 7 approved LNG producer. Unfortunately for the Bahamas there are none that meet this criteria available at this point in the USA. Carib Energy in conjunction with a company that we are in the midst merger is building such a facility which will be up and running by the end of 2013 making us the first new facility with the ability to send gas to the Bahamas. This is not a Greenfield site like others but a add on too an existing Cryogenic GTL facility in the Gulf Coast of the US. We very much would like to send our LNG to the Bahamas if the companies in the Bahamas are interested. However with that said this gas is being subscribed very quickly and many other places such as the USVI, Jamaica and others are already coming on board to purchase the limited amount of Gas available from our facilities. If the Bahamas are interested in Natural Gas then we hope to hear from somebody sooner than later.